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Real Estate News - April 2008
The following news stories are those which are most important for understanding the house price crash and the impact on house prices going forward...
Reuters: Fed cuts rates by 25 basis points to 2%, the lowest since December 2004. It was the seventh cut in a campaign that has brought the key lending rate down by 3.25 percentage points since mid-September. Such agressive action implies acute panic at the fed.
Marketwatch: The rise in foreclosures isn't just affecting homeowners, it's also putting pressure on renters.
Mortgage Strategy: Merrill Lynch has confirmed that its UK subsidiary Wave is temporarily suspending new lending. A spokesman for Merrill says: “We are temporarily suspending new lending as a result of little sign of recovery in the securitisation and whole loans markets.”
Real Estate Journal: A large California land partnership involving one of the largest U.S. pension funds has received a notice of default on a $1 billion loan after failing to meet certain terms of its lenders.
Real Estate Journal: U.S. Home-Price Drop Accelerates. Home-price declines are accelerating nationwide, pushing a hoped-for turnaround in the housing market further down the road. The Standard & Poor's/Case-Shiller index that measures home prices in 20 major metro areas dropped 12.7% in February from a year earlier - the sharpest decline in the data's two-decade history.
Real Estate Journal: U.K.'s Economic Slump Deepens. The credit crunch is tightening its grip on the British economy, with new data showing a slump in retail sales and mortgage approvals at a record low.
Real Estate Journal: The share of U.S. homes vacant and for sale, an important measure of the nation's housing supply, set a record in the first quarter in a signal that the glut of homes on the market isn't improving.
Mortgage Strategy: Nationwide reveals sixth month of falling prices.
Wall Street Journal: Countrywide Financial Corp. reported an $893 million loss for the first quarter, amid mounting evidence of serious problems with its underwriting of many home loans.
FT: Citi seeks to raise an extra $3bn.
FT: HBOS on Tuesday set out a gloomy outlook for the UK economy as it launched a £4bn rights issue and announced £2.84bn of writedowns on its portfolio of complex debt securities.
FT: Property crash hits buy-to-let promoter.
Marketwatch: Japan holds key interest rate unchanged at 0.5%. Central bank signals downside risks in pared back economic outlook report.
Reuters: Confidence slumps as U.S. home prices post record fall.
Mortgage Strategy: Gross lending by building societies fell £1.808bn to £3.631bn in March 2008 compared to £5.439bn in March 2007, new figures reveal.
Mortgage Solutions: HBOS confirms £4bn rights issue.
Marketwatch: British house prices fall seventh straight month: Hometrack.
Reuters: Oil hits peak near $120 on Nigeria, Britain woes.
FT: Brokers warn of further rises in mortgage rates.
FT: RBS poised to axe 7,000 jobs.
FT: Large US and European banks are raising so much capital to offset writedowns and loan losses that smaller institutions in the US may find it difficult to tap investors for the funds they need to survive.
Wall Street Journal: First-Time Home Buyers' Few Options.
Wall Street Journal: More U.S. households are falling behind on their utility bills and seeking public assistance, according to groups that arrange for help.
Wall Street Journal: Advice on Selling a Home Without a Real-Estate Agent.
Marketwatch: Reverse mortgages getting better. But costs, scams mean seniors still need to be on guard
Reuters: U.S. new home sales plunged to their lowest in more than 16 years in March and prices plummeted.
Marketwatch: U.S. mortgage rates rise on inflation fears.
Marketwatch: New-home sales sink 8.5% to 17-year low. Despite huge price declines, inventory on market rises to 27-year high.
FT: Cattles on Wednesday became the latest UK lender to seek cash from its shareholders, as the subprime loans specialist unveiled plans to raise about £200m.
FT: B&B hint at £82m writedown.
Reuters: Oil rallies to record near $120 on supply worries.
Reuters: Existing home sales fall 2 percent.
New York Times: British Bank Seeks New Funds.
Wall Street Journal: Scenes From the Mortgage Mess - Phoenix Couple Struggles to Hold On To Several Investment Properties.
Marketwatch: Sales of existing U.S. homes fall; median price down 7.7% in past year.
Marketwatch: Bank of Canada lowers target for overnight rate by 50 basis points to 3%.
New York Times: Bank of America said Monday that it saw a 77 percent drop in its profits for its first quarter this year from last year, as the banking giant announced nearly $2 billion in write-downs tied to its debt underwriting and trading activities.
New York Times: The Bank of England said Monday that it would allow banks to swap mortgage-backed securities valued at about $100 billion for government bonds in an effort to restore calm to the British financial markets.
New York Times: RBS to Axe Jobs as ABN Impact, Credit Crunch Bite.
FT: Throwing good money after bad - Efforts to recapitalise the US banking system took a crucial step forward as a group of mutual funds and hedge funds led by Corsair Capital, a little-known private equity firm, prepare to invest $7bn (£3.5bn) in National City, the 10th-biggest US bank.
Marketwatch: Mortgage shopping in bargain times. What's the best way to find a decent lender and get prequalified?
Reuters: Citigroup Inc posted its second straight quarterly loss on Friday, hurt by more than $16 billion of write-downs and costs related to credit losses, and said it will cut another 9,000 jobs.
Reuters: Oil hits new record $117 a barrel.
New York Times: Citigroup’s Write-Downs Lead to $5.1 Billion Loss.
New York Times: Workers Get Fewer Hours, Deepening the Downturn.
FT: Buy-to-let sector feels pinch of oversupply.
Reuters: Merrill Lynch & Co posted its third straight quarterly loss on Thursday and said it planned to cut 2,900 more jobs after recording more than $6.5 billion in write-downs on subprime mortgages and other risky assets.
Reuters: Oil hits record on U.S. inventory draw, dollar.
Marketwatch: New construction of U.S. houses plunged to the lowest level in 17 years in March, the Commerce Department estimated Wednesday.
Reuters: Washington Mutual Inc, the largest U.S. savings and loan, posted a $1.14 billion first-quarter loss on Tuesday, hurt by mounting credit losses as more mortgage borrowers fall behind on payments.
FT: Wachovia, the fourth-largest US bank by assets, warned on Monday that the nation’s economy was deteriorating more rapidly than expected as it revealed plans to raise $7bn in capital after a surprising first-quarter loss.
FT: Erinaceous Group entered administration on Monday, weighed down by debts of more than £250m, bringing an end to a corporate tale of rapid expansion and equally rapid decline.
FT: Fed bail-out of troubled lenders could threaten US credit rating.
Gold Money: The Dollar Hasn't Bounced.
Marketwatch: No-down-payment mortgages gone for good?
Marketwatch: Pending home sales index off 1.9% in February.
Marketwatch: Bank of England cuts key rate to 5%.
FT: Citigroup is nearing a deal to sell $12bn in leveraged loans at a discount to a group of leading private equity firms, marking another step in new chief executive Vikram Pandit’s efforts to shrink the beleaguered bank’s balance sheet.
FT: Washington Mutual, the largest savings and loan group in the US, will get a $7bn cash infusion from investors to boost its capital and cover losses arising from its subprime mortgages.
FT: The financial sector faces potential losses of almost $1,000bn as a result of the credit crisis, the International Monetary Fund said on Tuesday, warning of further losses and writedowns on prime mortgages, commercial real estate, leveraged loans and consumer finance.
FT: March U.K. Halifax house price index down 2.5%.
Reuters: Pending sales of previously owned U.S. homes fell to a record low in February and consumer confidence hit a new low this month, according to reports on Tuesday that heightened recession fears.
Property Week: House prices have fallen by 2.5% during March according to the Halifax - the biggest monthly fall since the 1990s house price crash.
FT: Lenders withdraw no-deposit mortgages.
Marketwatch: Top five questions to ask before renovating.
Marketwatch: Rooms With a Bubble View.
FT: Complex debt deal volumes hit 10-year low.
FT: Credit crisis causes office glut in City.
I like the Candy brothers, and hope that they can pull this off - but they will be fighting against the will of the markets each step of the way -- FT: Plans for what is billed to be the UK’s most expensive residential development at the former Chelsea Barracks site in London have been lodged with Westminster city council.
Reuters: Lehman sees banks, others writing down $400 billion.
Mortgage Strategy: Nearly 60,000 UK households at risk of repossession.
Reuters: Merrill seen cutting 10-15 pct nonbroker jobs.
Marketwatch: Hey, Fed: Stop robbing my savings and stop the inflation. Readers say they are worried about rising prices and a disincentive to save.
Marketwatch: Long-term mortgage rates rise as short-term rates drop.
Real Estate Journal: Manhattan Loses Luster As Home Sales Fall.
FT: WestLB is to retrench its global operations as it tries to recover from heavy subprime exposure that forced it into a wider-than-expected €1.6bn ($2.5bn) loss last year.
FT: HBOS expects house sale fall of up to 30%.
FT: UK lending low threatens house prices.
Reuters: Fannie Mae tightens rules for mortgages.
Mortgage Strategy: Savings inflows surge at building societies.
FT: Lehman raises $4bn in new capital.
FT: London property values struggle.
FT: BIS heralds demise of CDOs - The financial instrument that was one of the biggest drivers of the recent explosive growth in mortgage-related debt markets faces near-certain extinction, according to the central bankers’ bank.
Marketwatch: UBS plans $19 bln write-down / Deutsche Bank to take $3.9 billion hit / Lehman plans to offer 3 million convertible preferred shares / Morgan Stanley analysts see crisis as worst in 30 years / European banks' subprime write-downs top $68 billion.
New York Times: UBS Writes Down $19 Billion; Chairman to Leave.
Gold Money: Another Look at the Bull Market in Commodities.
FT: Lehman looks at subprime loan freeze.
FT: Lehman Brothers on Monday said it would sell at least $3bn worth of convertible preferred shares to help bolster its balance sheet and dispel rumours that it could face capital problems similar to those that sank Bear Stearns.
FT: Paragon, the specialist buy-to-let mortgage lender, has estimated total advances for new mortgages for the first half will be about 50 per cent less than a year ago as it grapples with the credit crunch and its own financing issues.